[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 08-15880 JAN 20, 2010
________________________ JOHN LEY
ACTING CLERK
D. C. Docket No. 03-21296-CV-FAM
M.D. KENNETH A. THOMAS, et al.,
Plaintiffs,
versus
BLUE CROSS AND BLUE SHIELD ASSOCIATION,
et al.,
Defendants,
HEALTH CARE SERVICE CORPORATION,
Defendant-Appellant-
Cross-Appellee,
ROBERT KOLBUSZ, M.D.,
CENTER FOR DERMATOLOGY AND SKIN
CENTER, LTD.,
Appellee-Cross-Appellant.
________________________
Appeals from the United States District Court
for the Southern District of Florida
_________________________
(January 20, 2010)
Before EDMONDSON and PRYOR, Circuit Judges, and CAMP,* District Judge.
PRYOR, Circuit Judge:
This appeal concerns the denial of a motion for an order to show cause why
Dr. Robert Kolbusz should not be held in contempt for violating an injunction that
barred physicians from prosecuting claims released as part of the settlement of a
national class action. A class of physicians had complained that Blue Cross and
Blue Shield Association, Inc., and its member plans had engaged in a scheme to
deny, delay, and reduce payments to the physicians. As part of the settlement, the
physicians agreed to release the Blue Cross plans from all claims arising from or
related to the class action and settlement agreement, and the district court
permanently enjoined the class members from prosecuting released claims against
the Blue Cross plans. Health Care Service Corporation contends that Kolbusz
violated the permanent injunction by prosecuting a complaint against the
Corporation in an Illinois court, and the Corporation moved for an order to show
cause why Kolbusz should not be held in contempt. The district court denied the
motion with respect to Kolbusz’s claims of tortious interference and defamation.
With respect to Kolbusz’s claim of breach of contract, the district court ruled that
Kolbusz’s claim was released in the settlement of the class action and afforded
*
Honorable Jack T. Camp, United States District Judge for the Northern District of
Georgia, sitting by designation.
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Kolbusz 20 days to withdraw that claim voluntarily to avoid contempt proceedings.
The Corporation appeals the denial of its motion as to Kolbusz’s tort claims, and
Kolbusz cross-appeals the decision about his claim of breach of contract. We
dismiss the cross-appeal for lack of jurisdiction because the decision to afford
Kolbusz 20 days to withdraw his claim of breach of contract is not a final or
otherwise appealable order. We reverse the decision that Kolbusz is not enjoined
from prosecuting his tort claims, and we remand for further proceedings.
I. BACKGROUND
In May 2003, several physicians, on behalf of themselves and all other
similarly situated physicians, filed a complaint against Blue Cross and Blue Shield
Association, Inc., and its member plans throughout the United States. The
complaint asserted claims of conspiracy and aiding and abetting under the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961–1968,
and sought damages as well as declaratory and injunctive relief. The physicians’
claims were based on allegations that the health insurance companies had “engaged
in a conspiracy to improperly deny, delay, and/or reduce payments to physicians,
physician groups, and physician organizations by engaging in several types of
allegedly improper conduct.”
The parties eventually agreed to a settlement of the class action. The district
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court later entered an order that certified the class and granted final approval of the
settlement agreement. Love v. Blue Cross & Blue Shield Ass’n, No. 03-21296
(S.D. Fla. Apr. 19, 2008). As part of the settlement, the Blue Cross plans agreed to
implement business practice initiatives and establish a settlement fund for payment
of claims to class members. In exchange, the class members agreed to release the
Blue Cross plans from all claims arising out of or related to matters referenced in
the class action and settlement agreement:
Upon the Effective Date, the “Released Parties[]” . . . shall be
released and forever discharged . . . from any and all causes of action .
. . of whatever kind, source or character whether arising under any
federal or state law, which . . . includes, but is not limited to, the
Racketeer Influenced and Corrupt Organizations Act, antitrust and
other statutory and common law claims, intentional or non-intentional,
. . . arising on or before the Effective Date, that are, were or could
have been asserted against any of the Released Parties by reason of,
arising out of, or in any way related to any of the facts, acts, events,
transactions, occurrences, courses of conduct, business practices,
representations, omissions, circumstances or other matters referenced
in the Action, or addressed in this Agreement . . . .
The district court permanently enjoined the releasing parties from filing or
prosecuting “any or all Released Claims against one or more Released Parties.”
The district court expressly retained jurisdiction as to matters relating to the
interpretation, administration, and consummation of the settlement agreement, and
the enforcement of extant injunctions. In a separate order, the district court entered
judgment in the class action.
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Kolbusz, a board certified dermatologist, practices medicine at the Center for
Dermatology and Skin Cancer, Ltd., where he treats patients insured by Health
Care Service Corporation, one of the Blue Cross plans. The parties agree that
Kolbusz is a releasing party and that the Corporation is a released party. Although
all class members were given an opportunity to object to and opt out of the
settlement agreement, Kolbusz failed to do so by the prescribed deadlines.
In January 2008, Kolbusz and the Center commenced a civil action against
the Corporation in an Illinois court. The amended complaint of Kolbusz and the
Center asserted claims of breach of contract, tortious interference with contractual
relationships, tortious interference with prospective economic advantage, and
defamation pro quod. Kolbusz supported these claims with allegations that the
Corporation had engaged in several improper practices “solely to reduce its
financial obligations” to him. Specifically, Kolbusz alleged that the Corporation
had made false statements to his patients regarding its reasons for refusing to pay
for medical services that he had rendered. Kolbusz alleged that the Corporation
had falsely informed his patients that he performed procedures that were not
medically necessary, that he provided erroneous billing information, and that he
was under investigation.
About a month after Kolbusz commenced his action in the Illinois court, the
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Corporation informed him that, because he had failed to opt out of the settlement
agreement, the permanent injunction entered in the class action barred him from
prosecuting his complaint. The Corporation demanded that he dismiss the action.
Kolbusz then filed a motion for permission to opt out of the settlement agreement
belatedly, but the district court denied the motion.
The Corporation filed a motion in the district court for an order to enforce
the permanent injunction against Kolbusz and to show cause why Kolbusz should
not be held in contempt for prosecuting released claims. The district court referred
the motion to a magistrate judge for a report and recommendation. The magistrate
judge concluded that Kolbusz is enjoined from prosecuting his claim of breach of
contract, but not his claims of tortious interference and defamation. The district
court entered an order that affirmed and adopted the magistrate judge’s report and
recommendation. The order instructed Kolbusz to withdraw his claim of breach of
contract within 20 days, and provided that, if Kolbusz failed to do so, the district
court would revisit the contempt motion.
II. JURISDICTION
Neither party challenges our jurisdiction to entertain this appeal, but “we are
obligated to address jurisdictional questions sua sponte.” Frulla v. CRA Holdings,
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Inc., 543 F.3d 1247, 1250 (11th Cir. 2008). This Court directed the parties to file
supplemental briefs on the issue of jurisdiction. Both parties contended that we
have jurisdiction to review the order in its entirety. Kolbusz contended that the
order is an appealable interlocutory order because it grants in part and denies in
part a request for injunctive relief. The Corporation contended that the order is a
final order, or, in the alternative, an appealable collateral order or interlocutory
order. At oral argument, Kolbusz maintained that we have jurisdiction over his
cross-appeal because the order that allowed him 20 days to withdraw his claim of
breach of contract grants the Corporation injunctive relief. In the alternative,
Kolbusz argued that we can exercise pendent appellate jurisdiction. The
Corporation acknowledged at oral argument that we lack jurisdiction over
Kolbusz’s cross-appeal.
We discuss our jurisdiction in two parts. First, we discuss whether we have
jurisdiction over the appeal by the Corporation. Second, we discuss whether we
have jurisdiction over Kolbusz’s cross-appeal.
A. We Have Jurisdiction over the Appeal by the Corporation.
The denial of the motion as to Kolbusz’s tort claims is appealable. It is well-
settled that we have jurisdiction to review the denial of a motion for an order to
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show cause why a party should not be held in contempt because it is a final order.
Davis v. Bd. of Sch. Comm’rs, 517 F.2d 1044, 1052 (5th Cir. 1975); see also 28
U.S.C. § 1291; Gilbert v. Johnson, 490 F.2d 827, 829 (5th Cir. 1974).
Consequently, we have jurisdiction over the denial of the motion for an order to
show cause why Kolbusz should not be held in contempt for prosecuting his tort
claims against the Corporation.
B. We Lack Jurisdiction over Kolbusz’s Cross-Appeal.
Kolbusz’s cross-appeal presents a more difficult question that requires us to
consider four potential bases for exercising jurisdiction. First, we consider whether
the order about Kolbusz’s claim of breach of contract is a final decision within the
meaning of section 1291. Second, we consider whether we can exercise
jurisdiction under the collateral order doctrine. Third, we consider whether the
order qualifies for appeal under section 1292(a)(1). Fourth, we consider whether
pendent appellate jurisdiction exists.
1. Section 1291 Jurisdiction
Kolbusz’s cross-appeal does not concern a final order. Section 1291 gives
us “jurisdiction of appeals from all final decisions of the district courts.” 28 U.S.C.
§ 1291. In postjudgment proceedings, a postjudgment order is final for purposes
of section 1291 if it “finally settles the matter in litigation” by disposing of all
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issues raised in the motion. Delaney’s Inc. v. Ill. Union Ins. Co., 894 F.2d 1300,
1305 (11th Cir. 1990); see also Autotech Techs. LP v. Integral Research & Dev.
Corp., 499 F.3d 737, 745 (7th Cir. 2007); Motorola, Inc. v. Computer Displays
Int’l, Inc., 739 F.2d 1149, 1154 (7th Cir. 1984).
The order that instructs Kolbusz to withdraw voluntarily his claim of breach
of contract within 20 days is not a final decision because it does not dispose of all
of the issues raised in the motion. The Corporation sought an order to show cause
why Kolbusz should not be held in contempt for prosecuting released claims.
Although the order ruled that Kolbusz is enjoined from prosecuting his claim of
breach of contract, the order did not completely dispose of the issue. The order
expressly contemplated further action in the event that Kolbusz failed to withdraw
his claim within 20 days. It stated that if Kolbusz “fail[s] to voluntarily withdraw
[his claim of breach of contract], [the] contempt motion shall be revisited by this
Court.” Because the order “did not hold [Kolbusz] in contempt or impose any
sanction” for prosecuting a released claim in violation of the injunction, it is not
appealable as a final order. Major v. Orthopedic Equip. Co., 561 F.2d 1112, 1115
(4th Cir. 1977).
2. Collateral Order Jurisdiction
The order instructing Kolbusz to withdraw his claim of breach of contract
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within 20 days also does not fall within the small class of decisions excepted from
the final judgment rule under the collateral order doctrine. To come within this
class of decisions, “‘the order must [1] conclusively determine the disputed
question, [2] resolve an important issue completely separate from the merits of the
action, and [3] be effectively unreviewable on appeal from a final judgment.’”
Miccosukee Tribe of Indians v. S. Fla. Water Mgmt. Dist., 559 F.3d 1191, 1198
(11th Cir. 2009) (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.
Ct. 2454, 2458 (1978)). Even if the order conclusively determined that Kolbusz’s
claim of breach of contract is a released claim and that the injunction bars him
from prosecuting the claim, that issue is not completely separate from the motion
for an order to show cause. To the contrary, a decision to hold Kolbusz in
contempt necessarily would involve a ruling that Kolbusz had violated the
injunction by prosecuting a released claim. The order also is not effectively
unreviewable on appeal from a final judgment. If Kolbusz refuses to withdraw his
claim of breach of contract and the district court imposes noncontingent contempt
sanctions, Kolbusz can appeal from that ruling. Combs v. Ryan’s Coal Co., 785
F.2d 970, 976–77 (11th Cir. 1986).
3. Section 1292(a)(1) Jurisdiction
We also reject Kolbusz’s argument that the order instructing him to
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withdraw his claim of breach of contract within 20 days granted the Corporation
injunctive relief. Under section 1292(a)(1), we have jurisdiction over orders that
grant injunctions, as well as orders that modify injunctions. 28 U.S.C. §
1292(a)(1). In evaluating whether we have jurisdiction over an interlocutory order,
we “should examine the effect, and not merely the letter, of [the] . . . order[] to be
reviewed.” Mitsubishi Int’l Corp. v. Cardinal Textile Sales, Inc., 14 F.3d 1507,
1515 (11th Cir. 1994).
The effect of the order was not to grant new injunctive relief. The
magistrate judge’s report and recommendation stated that the claim of breach of
contract “is . . . a Released Claim” and that Kolbusz and the Center “are enjoined
from pursuing the . . . claim.” We read this language as ruling that Kolbusz is
enjoined from prosecuting his claim under the extant injunction, not as granting
new injunctive relief. The order also provides that, if Kolbusz fails “to voluntarily
withdraw” the claim, the district court will revisit the motion of the Corporation for
an order to show cause why Kolbusz should not be held in contempt. The word
“voluntarily” establishes that the district court simply afforded Kolbusz an
opportunity to comply with the permanent injunction to avoid contempt
proceedings.
Because the order interprets the permanent injunction, it also is not
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appealable under section 1292(a)(1) as an order modifying an injunction. For
purposes of 1292(a)(1), the distinction between an order clarifying an underlying
injunction and an order modifying an injunction is of crucial importance, as only
the latter is an appealable order. See Birmingham Fire Fighters Ass’n 117 v.
Jefferson County, 280 F.3d 1289, 1292–93 (11th Cir. 2002); Ass’n of Cmty. Orgs.
for Reform Now v. Ill. State Bd. of Elections, 75 F.3d 304, 306 (7th Cir. 1996);
Major, 561 F.2d at 1115. An order that interprets an injunction amounts to a
modification only when it “changes the legal relationship of the parties by blatantly
misinterpreting the injunction.” Birmingham Fire Fighters, 280 F.3d at 1293. To
determine whether an interpretation modifies an injunction, we look for
misinterpretations that “leap[] from the page.” Id.
The ruling that Kolbusz’s claim of breach of contract is a released claim and
that he is enjoined from prosecuting it does not modify the permanent injunction.
The claim release and accompanying injunction are extremely broad, extending to
any and all claims arising from or related to matters referenced in the class action
or settlement agreement. Kolbusz’s claim of breach of contract is based on
allegations that the Corporation engaged in improper practices to reduce its
financial obligations to Kolbusz. These allegations mirror the allegations made by
physicians in the class action that the Blue Cross plans improperly delayed, denied,
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and reduced payments to physicians. Consequently, the order “is simply an
interpretation” and does not qualify for appeal under section 1292(a)(1). Major,
561 F.2d at 1115.
4. Pendent Appellate Jurisdiction
In rare circumstances, pendent appellate jurisdiction can provide a basis for
exercising jurisdiction over an otherwise nonappealable order. King v. Cessna
Aircraft Co., 562 F.3d 1374, 1379–81 (11th Cir. 2009). To qualify for review
under our pendent appellate jurisdiction, the nonappealable order must be
inextricably intertwined with an appealable order, or review of the former must be
“‘necessary to ensure meaningful review of the latter.’” Id. at 1379 (quoting Swint
v. Chambers County Comm’n, 514 U.S. 35, 51, 115 S. Ct. 1203, 1212 (1995)).
We have declined to exercise pendent appellate jurisdiction when “resolution of
the nonappealable issue was not necessary to resolve the appealable one.” Id. at
1380.
Kolbusz’s cross-appeal does not satisfy the requirements for pendent
appellate jurisdiction. The determination by the district court that Kolbusz is not
enjoined from prosecuting his claims of tortious interference and defamation
stands alone. It is not based on or otherwise dependent on resolution of the issue
whether Kolbusz is enjoined from prosecuting his claim of breach of contract. See
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id. The magistrate judge’s report and recommendation “clearly shows the analysis
was conducted separately for” Kolbusz’s claims of tortious interference and
defamation. Id. Because we need not reach the merits of Kolbusz’s cross-appeal
to decide the appeal by the Corporation, Kolbusz’s cross-appeal is not one of the
rare situations that warrants the exercise of our pendent appellate jurisdiction.
III. STANDARDS OF REVIEW
We review for abuse of discretion the denial of a motion to show cause why
a party should not be held in contempt. Parker v. Scrap Metal Processors, Inc., 468
F.3d 733, 738 (11th Cir. 2006). “A district court abuses its discretion if it applies
an incorrect legal standard, applies the law in an unreasonable or incorrect manner,
follows improper procedures in making a determination, or makes findings of fact
that are clearly erroneous.” Citizens for Police Accountability Political Comm. v.
Browning, 572 F.3d 1213, 1216–17 (11th Cir. 2009). We review questions of law
de novo. Id. at 1217.
IV. DISCUSSION
The Corporation argues that the district court abused its discretion when it
denied the motion of the Corporation for an order to show cause why Kolbusz
should not be held in contempt. “On a contempt motion, the movant bears the
initial burden of proving, by clear and convincing evidence, the defendant’s
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noncompliance with a court order.” Parker, 468 F.3d at 738–39. After the movant
satisfies this burden, the burden shifts to the alleged contemnor to explain his
noncompliance at a show cause hearing. Chairs v. Burgess, 143 F.3d 1432, 1436
(11th Cir. 1998). The Corporation contends that Kolbusz’s prosecution of claims
of tortious interference and defamation violates the permanent injunction because
the claims are released.
The Corporation advances three arguments that the district court abused its
discretion. First, the Corporation contends that Kolbusz’s claims of tortious
intererence and defamation are released and their prosecution violates the
injunction entered in the class action because the claims are related to the matters
addressed in the class action. Second, the Corporation contends that the claims are
released because they are based on fee for service claims. Third, the Corporation
contends that the claims are related to the business practices addressed in the
settlement agreement. Because we agree with the Corporation that Kolbusz’s
claims of tortious interference and defamation are related to matters addressed in
the class action, we need not address the second and third arguments.
The Corporation presented undisputed evidence that Kolbusz’s prosecution
of his claims of tortious interference and defamation violated the permanent
injunction because the claims are related to matters addressed in the class action.
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The permanent injunction bars class members from filing or prosecuting released
claims, and the settlement agreement broadly defines released claims to include
claims that are related to matters addressed in the class action or settlement
agreement. The class action alleged that the Blue Cross plans “on their own and as
part of a common scheme, systematically deny, delay and diminish the payments
due to physicians so that they are not paid in a timely manner for the covered,
medically necessary services they render.” The class action further alleged that the
Blue Cross plans “collectively insure such a large pool of patients that they are able
to perpetuate this scheme through their combined economic power and market
dominance.”
Kolbusz’s claims of tortious interference and defamation are related to
matters addressed in the class action because they are based on allegations that the
Corporation engaged in improper practices to deny and delay payments to Kolbusz
and that these practices caused him to lose existing patients as well as referrals. To
support his claim of tortious interference with contractual relationships, Kolbusz
alleged that the Corporation drove away his patients by wrongfully refusing to pay
for medical procedures. Likewise, to support his claim of tortious interference
with prospective economic advantage, Kolbusz alleged that the Corporation caused
his patients to stop giving him referrals by wrongfully refusing to pay for medical
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procedures. Finally, Kolbusz’s claim of defamation pro quod is based on
allegations that the Corporation falsely informed his patients that their claims were
denied because Kolbusz had provided unnecessary and inappropriate care and
engaged in fraudulent or deceptive billing practices, when in truth the Corporation
wrongfully denied claims for medically necessary treatments. Kolbusz alleged that
the Corporation engaged in all of these practices “solely to reduce its financial
obligations” to him. These tort claims are related to the concerns addressed in the
class action.
The ruling of the district court to the contrary was an abuse of discretion for
two reasons. First, the district court incorrectly reasoned that Kolbusz’s claims of
tortious interference and defamation are unrelated to the allegations made in the
class action because they hinge on whether the Corporation “intentionally
communicated defamatory and false information to Dr. Kolbusz’s patients.” It is
irrelevant that Kolbusz’s claims depend on a different legal theory than the claims
asserted in the class action or require Kolbusz to prove matters in addition to or
different from the claims asserted in the class action. The claim release extends to
“any and all causes of action . . . of whatever kind, source, or character” that are
related to matters addressed in the class action, including “antitrust and other
statutory and common law claims, intentional or non-intentional . . . that are, were,
17
or could have been asserted against any of the Released Parties.” This broad
language encompasses Kolbusz’s claims of tortious interference and defamation.
Second, the district court erroneously reasoned that the claims are not released
because they “require[] a highly factual analysis of events that allegedly took place
long after the [class action] was filed.” Under the settlement agreement entered in
the class action, the relevant inquiry for determining whether a claim is released is
not whether the acts giving rise to the complaint occurred after the class action was
filed or the settlement agreement was entered, but whether they occurred after the
effective date of the settlement agreement. The claim release applies to claims
“arising on or before the Effective Date,” and the settlement agreement provides
that the effective date is one business day after all appeals from the final approval
order are dismissed. We dismissed with prejudice all appeals from the final
approval order on June 19, 2009. Kolbusz’s claims of tortious interference and
defamation arise from acts that occurred before the effective date, which is the only
date the district court should have considered.
V. CONCLUSION
We DISMISS the cross-appeal for lack of jurisdiction. We REVERSE the
order that denied the motion for an order to show cause why Kolbusz and the
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Center should not be held in contempt and REMAND to the district court for
further proceedings.
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